By Colin Twiggs
September 9, 2008 6:00 a.m. ET (8:00 p.m. AET)
Spot gold is headed for another test of primary support at $770. Failure would offer a target of $700, calculated as $770 - ($850 - $770). Respect of support, on the other hand, would indicate further consolidation — and another test of $850.
West Texas Intermediate Crude broke through support at $110, warning of a primary down-trend. This would be confirmed if the key psychological level of $100 is broken. Global crude oil consumption is expected to slow as major economies edge into recession — driving prices lower.
The euro is in a strong down-trend, having broken support at $1.43.
Penetration of the long-term rising trendline also warns of a further decline. The calculated target is $1.26, that is $1.43 - ( 1.60 - 1.43 ), but long-term support at $1.20 appears a more likely candidate.
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The dollar retraced to test the new resistance level after falling sharply through support at 108.50 against the yen. Respect of resistance is likely and would warn of a test of primary support at 103.50. Recovery above 111.00 is not expected, but would confirm the primary up-trend.
The Australian dollar is testing support at $0.80 against the greenback. Failure would test long-term support at $0.70.
The Aussie is testing long-term support at 86 against the yen. Failure of support is likely — and would offer a target of 75.
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